By Eric Vandenbroeck and co-workers

China’s Great Green March Across the Globe

In the past year, Chinese solar panel makers have been opening or ramping up manufacturing facilities in Indonesia to take advantage of a burgeoning domestic market with a low solar energy penetration rate and cheap local labor.

The real focus now for Chinese companies is production overseas, including in the US and within the EU, but especially in developing countries where there is growing demand for clean-tech goods. In Indonesia, there are now four Chinese solar manufacturing joint ventures, including Trina Mas Agra Indonesia.

While Indonesia appears not to be in the US’ crosshairs – for now – navigating America’s trade policies is something of a cat-and-mouse game for Chinese companies, including in Southeast Asia. The US imposed a new round of anti-dumping duties on solar panel imports from Cambodia, Malaysia, Thailand, and Vietnam in November 2024. The punishing taxes of between 21.31 percent and 271.2 percent have already bitten some Chinese solar makers, who have exited Malaysia or scaled back their operations there.

Indonesia’s first and largest integrated solar cell and solar panel manufacturing plant, located in Central Java, is a joint venture with Chinese company Trina Solar.

“We are cautious,” said Wilson Kurniawan, a senior officer with Sinar Mas who has been closely involved in the Trina Mas Agra Indonesia solar plant. “While Indonesia is not currently on the US solar trade blacklist, we are concerned about potential trade barriers, especially given America’s increasingly protectionist stance.” The solar plant is focusing for now on the Indonesian market, where there is strong growth in the demand for solar energy, said Kurniawan. Solar cells could in the future, be exported to other countries in the region. Strong domestic growth is helped by falling solar costs and rising energy demand, as well as large-scale solar projects in Batam that may send renewable energy in the coming years.

 

Behind China’s shift to developing countries In China

Clean-tech companies squeezed by a hypercompetitive domestic market are saddled with excess capacity and razor-thin profit margins.

A worker is inspecting solar panels at a solar farm in Dunhuang, which is in China’s northwestern Gansu province, on the edge of the Gobi Desert.

But in their pursuit of more lucrative markets overseas, they have unwittingly rubbed up against governments such as those of the US and EU countries, which are faced with the dilemma of protecting their industries while ensuring national security and not over-relying on Chinese providers. Given the rising barriers from developed countries, Chinese businesses are focused on the developing world, which is now the largest market for their solar, wind, and EV exports, according to Comtrade data.

 Chinese companies are finding these host countries, including Indonesia, happy to accept their know-how in clean tech – along with investments and factories that create local jobs and tax revenue – and the help in transitioning from fossil fuels. “It’s a win for the recipient countries because they are getting factories, wind farms, solar farms, batteries and real jobs.

Production workers are getting busy at the Trina Mas Agra Indonesia solar panel plant.

In the automotive hub of Karawang on the eastern outskirts of Jakarta, a US$1.2 billion factory – a joint venture between CATL, the world’s largest EV battery maker, and Indonesia Battery Corporation (IBC) – is expected to start production in April 2026. IBC is a government initiative that aims to turn Indonesia into a global EV battery manufacturer. It is owned by state-owned firms, including nickel and gold miner Aneka Tambang, oil and gas company Pertamina, and electricity utility PLN.

 

Holding the reins in a trillion-dollar clean-tech future

The Chinese have built an unassailable lead in the clean-tech space, despite the best efforts of US and EU leaders to apply the brakes. And the prize is immense. The International Energy Agency (IEA) says the global market for clean technologies is set to rise from US$700 billion in 2023 to more than US$2 trillion by 2035.

A motorcyclist riding past wind turbines in Vietnam’s Dak Lak province.

The Trina solar joint venture project in Indonesia is just one of many projects involving Chinese clean-tech firms that CEF has been tracking globally. Since the start of 2023, more than 180 deals worth more than US$141 billion have been announced – and the number grows by the week. They include joint ventures and direct investments in energy projects.

The deals range from multibillion-dollar battery ventures in Europe and wind farms in Australia, Laos, and Uzbekistan to EV plants in Turkey and Thailand. They also include solar panel manufacturing in Saudi Arabia and the US. By spreading their manufacturing bases and deploying clean energy tech directly to power generation projects, Chinese firms can mitigate the risk of trade sanctions by the US, EU, and other countries while entrenching China’s dominance in clean tech.

 

How China became a clean-tech powerhouse

China simply has all the right ingredients: a well-established local supply chain, stable raw material prices, and cheap labor. Its vast clean-tech industrial complexes at home have slashed the costs of green products globally, giving the nation a technological edge that foreign competitors are struggling to match.

With a sizeable domestic market and state-backed financing, companies can produce at volumes others could not dream of. Local governments in China sweeten the deal with tax breaks, free land, and expedited permits, creating industrial ecosystems that draw talent and investment.

This level of state support is difficult for many other nations to match, triggering accusations from competitors of unfair trade practices and making China’s exports an easy target for tariffs. Diversified clean-tech supply chains can accelerate the global green transition because there would be fewer concerns over the supply chain and energy security.

Southeast Asia is a major prize for Chinese clean-tech companies. With nearly 700 million people, it is one of the world’s fastest-growing regions. And it needs lots of energy. The IEA’s 2024 South-east Asia Energy Outlook report said the region could account for 25 per cent of global energy demand growth between now and 2035, second only to India over the period. And regional electricity demand growth is set to grow about 4 per cent annually.

The problem is that the region remains deeply dependent on polluting fossil fuels and is struggling to ramp up clean energy investment, though more favorable policies in Malaysia, the Philippines, Singapore, and Vietnam are changing the picture. But in Indonesia, South-east Asia’s largest economy, the picture is less clear.

Farmers are working in a rice field next to electricity pylons in Hanoi, Vietnam. The country’s electricity consumption is expected to grow to between 12 per cent and 13 per cent from 2024 to 2025.

Renewable energy investment in the region remains far below what is needed to match electricity demand growth or help the region meet its climate targets. Indonesia, for instance, had set a target of 23 per cent renewable energy by 2025 but later revised it to 17 per cent to 19 per cent. The reality gap between the region’s net-zero ambitions and true progress in its energy and green transition was highlighted in a 2024 report by global consultancy Bain & Company, Singapore’s investment company Temasek, investment platform GenZero and Standard Chartered Bank.

An estimated US$1.5 trillion is required to fund the transition until 2030, but only US$45 billion has been invested across dedicated green investments since 2021, the report said. Chinese companies are eyeing Southeast Asia, which has already become a major base for solar panel and component manufacturing as well as a growing center for EV manufacturing and battery materials production.

Globally, suspicions remain in some countries about the true intention of Chinese green investment. These countries also fear that allowing local manufacturing may price out domestic clean-tech competitors, and they have labor concerns such as ensuring local employment and fair employment practices. “China’s domestic clean-tech industry maturity and growing overseas investment can provide a real opportunity for many countries in Southeast Asia to meet rising energy demand and accelerate transition to a low-carbon economy.

But it is vital to cater to local development needs and respect local cultures and norms, she said. In the past, some investments under China’s Belt and Road Initiative were criticized for hiring only imported Chinese workers and accused of being debt traps for the host nation. But the majority of clean-tech investment these days is by private Chinese companies, not state-owned enterprises.

An aerial photo showing X9 electric vehicles by Chinese EV manufacturer Xpeng waiting to be loaded onto an NYK Line ship for Thailand at a ceremony at the Port of Guangzhou in China’s Guangdong province.

China’s EV giant BYD aims to complete its US$1 billion plant in West Java at the end of 2025, the head of its local unit said in January. Over in Thailand, BYD’s plant – its first passenger car production base overseas – has already created more than 10,000 jobs it expects to generate. It continues to recruit and train local workers “to face the challenges of cross-cultural coordination and management”. BYD says it has also helped to attract more parts suppliers and promoted the upgrading of Thailand’s new-energy automotive industry.

Workers are conducting checks at BYD’s electric vehicle factory in Rayong, Thailand.

While cheap Chinese clean tech has been embraced by developing countries that lack the expertise and have little concern over the politics of such transactions, it has created friction with other countries and regions. The US, as early as 2012, imposed tariffs on Chinese solar panels – tariffs that have expanded under subsequent administrations to cover other clean tech such as EVs, battery components, and wind turbine parts. In November 2024, the EU, which has tariffs on Chinese EVs, in November 2024 proposed that Chinese companies be required to transfer intellectual property to European businesses in exchange for access to EU subsidies under a new trade regime for clean technologies.

A worker welding part of a wind turbine in a wind power equipment company in Lianyungang, in China’s Jiangsu province.

Chinese wind turbine manufacturers like Mingyang have faced significant cost pressures at home, where the price of onshore wind turbines has tumbled nearly 60 percent since the beginning of 2020, according to data by BloombergNEF. Even in overseas markets where they enjoy higher margins, Chinese onshore turbines were still nearly 30 percent cheaper than those of US and European manufacturers between 2019 and 2024. As Western competitors retreat from certain markets to focus on the US and Europe, where they can command higher prices, Chinese companies are moving in.

Goldwind wind turbine blades are waiting to be loaded onto a ship for export at the Port of Lianyungang in China’s Jiangsu province.

Those who have seen the most benefit from relatively cheap Chinese wind technology are developing countries, such as nations in Central Asia and Africa. But in Europe, uncertainty over what kind of controls policymakers could impose on the Chinese companies is making it difficult for the manufacturers to navigate.

 

 

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